Norman Villamin, chief investment officer at Switzerland's Union Bancaire Privée, said the US-China clash represented much more than just a tussle over trade.

Coming up with culprits for the most recent panic isn't hard.

"It's not about trade - it's about who is going to be the economic and political leader of the world in 10 to 20 years from now. It's about tech, and who is going to dominate that landscape," he said.

Investors fear the trade war between China and the US will escalate. They worry America's central bank will raise interest rates too far. And they're concerned about Britain's exit from the European Union. All factors that could hurt company profits.

The tougher question to answer is where the market is headed. Will it keep going down or bounce back?

Many on Wall Street are describing the recent stock turbulence as a market correction - defined as a drop of at least 10% from a recent high.

How long it lasts depends on what investors perceive are the prospects for global economic growth.

And right now the psychology of the markets appears fragile.

Markets 'spooked'

Markets 'spooked'

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The arrest of Huawei's CFO has reignited fears that trade reconciliation between the US and China may not be forthcoming any time soon.

Oil prices fell on Thursday as traders waited for news from the meeting of Opec oil-producing nations in Vienna, with some member states keen to agree on a production cut to drive up prices.

"The market is spooked by the damage a continuing trade war could do to global economic prospects, and that's hitting share prices in the UK and overseas.

He added that "the valuation on the UK stock market looks close to its historical average, which means it's neither Black Friday cheap nor dotcom expensive".

"However, it's unlikely to pick up significantly until there's greater clarity on the UK's withdrawal from the EU. Meanwhile, US trade policy also continues to undermine confidence in global markets."

Analysts are worried a series of new tariffs will slow global trade.

In October, the US trade deficit - which measures the difference between imports and exports of goods and services - increased to $55.5bn, the highest level in a decade.

The record came amid a decline in exports, as major markets including China, the European Union and Mexico purchased fewer US products.

All three markets have hit US goods with new import duties in retaliation for tariffs imposed by the Trump administration.

Oil prices fell as traders waited for news from the meeting of Opec oil-producing nations in Vienna, with some member states keen to agree on a production cut to drive up prices.

Members tentatively agreed to cut output but were waiting for a commitment from Russia, which is not in the cartel, before making any firm decisions, according to insiders.

Members tentatively agreed to cut output but were waiting for a commitment from Russia, which is not in the cartel, before making any firm decisions, according to insiders.

"We're looking for a sufficient cut to balance the market, equally distributed between countries," said Saudi Arabia's oil minister, Khalid al-Falih, before the meeting.

Investors were also reacting to new figures for the US trade deficit, which measures the difference between imports and exports of goods and services.

That gap increased to $55.5bn in October - the highest level in a decade - as major markets including China, the European Union and Mexico purchased fewer US products.

All three markets have hit US goods with new import duties in retaliation for tariffs imposed by the Trump administration.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The arrest of Huawei's CFO has reignited fears that trade reconciliation between the US and China may not be forthcoming any time soon.

"The market is spooked by the damage a continuing trade war could do to global economic prospects, and that's hitting share prices in the UK and overseas. "

Norman Villamin, chief investment officer at Switzerland's Union Bancaire Privée, said the US-China clash represented much more than just a tussle over trade.

"It's not about trade - it's about who is going to be the economic and political leader of the world in 10 to 20 years from now. It's about tech, and who is going to dominate that landscape," he said.